After funds it had set aside to meet future claims from its policy holders dipped to a concerning level, the insurance regulator Insurance Regulatory and Development Authority (IRDAI) Thursday stopped Reliance Health Insurance Co from selling insurance.
“The Reliance Health Insurance company, which commenced operation in October 2018, has not been able to maintain the required solvency margin since June 2019. After it came to the knowledge of IRDAI in the later part of August, 2019, a direction was issued to RHICL to restore the required level of solvency margin within a period of one month,” IRDAI said in a statement.
It further said that despite repeated follow-up, the insurer did not improve its capital. Thereafter, the insurer was issued a show cause notice and given another opportunity to present its case. But there has been no improvement and rather a deterioration in the financial position of RHCIL.
Reliance Health Insurance is part of Anil Ambani's Reliance Group, which has been facing serious liquidity issues.
Deccan Herald is on WhatsApp Channels | Join now for Breaking News & Editor's Picks